United Kingdom

United Kingdom’s housing market woes persist

Lalaine C. Delmendo

UK’s housing market continues to struggle, amidst falling property demand and residential construction activity. The average house price in the UK increased slightly by 1% to £260,791 (US$ 326,555) year-on-year in Q1 2024, based on figures released by Nationwide – an improvement from the 1% fall a year earlier but still far lower than the robust growth of 12.6% recorded two years ago. When adjusted for inflation, house prices declined by 2.1% in Q1 2024 from a year earlier.

Quarter-on-quarter, nationwide house prices rose slightly by 0.6% (0.9% inflation-adjusted) in Q1 2024.

United Kingdom’s house price annual change

Eight of the thirteen major regions saw house price rises during the year to Q1 2024, with Northern Ireland registering the biggest growth of 4.6% to an average price of £181,303 (US$227,022). It was followed by the North, with a house price increase of 4.1%, Scotland (3.7%), North West (2.9%), Yorks & The Humber (2.4%), London (1.6%), Wales (1.2%), and East Midlands (0.5%).

On the other hand, house price falls were registered in South West (-1.7%), East Anglia (-1.3%), Outer South East (-1%), Outer Metropolitan Area (-0.6%), and West Midlands (-0.2%).

London’s average house price stood at £519,505 (US$650,509) in Q1 2024. London’s house prices are now about 72% above the 2007 peak levels.

Demand continues to fall. During 2023, the total number of residential property transactions in the UK fell by 19% to 1,019,220 as compared to a year earlier, following a 14.8% decline in 2022, according to HM Revenue & Customs. Then in Q1 2024, transactions dropped further by 7.8% y-o-y to 227,040 units. Quarter-on-quarter, transactions were down by 13.8% during the latest quarter.

UK’s residential construction activity is slowing again. In 2023, dwelling starts fell by 15.6% to 148,930 units as compared to a year earlier, following a slight decline of 0.9% in 2022, according to the Ministry of Housing, Communities and Local Government. Likewise, dwelling completions fell by 11.1% to 158,190 units in 2023 from a year earlier, following a meager increase of 1.7% in the prior year.

The UK housing market is expected to remain muted this year.

“It’s likely to be another muted year for the market, however, the better-than-anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs. We predict a modest average 1% fall in new seller asking prices in 2024. The underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year,” said Rightmove property expert Tim Bannister.

The overall economic outlook remains gloomy. During 2023, the UK economy was estimated to have increased by a meager 0.1%, a sharp slowdown from growth of 4.3% in 2022, and 7.6% in 2021, according to the Office for National Statistics. The National Institute of Economic and Social Research (NIESR) expects the UK economy to remain subdued this year, with a projected real GDP growth rate of 0.9%. The International Monetary Fund (IMF) is even more pessimistic, forecasting a growth of just 0.5%.

The housing boom and bust in the UK

UK property prices saw huge rises from 1996 to 2007:

  • Prices in London rose 289.1% (228.1% in real terms).
  • Prices in Northern Ireland rose by 393.2% from Q3 1996 to Q3 2007 (315.9% in real terms), the highest rise among UK regions.
  • Price increases in other regions ranged from 187.9% (142.8% in real terms) for Scotland, to 245.5% (191.3% real) for the Outer Metropolitan Area.
  • The national index rose 240.9% (187.5% in real terms) over the same period (all figures from Nationwide).

In early 2007 interest rates were raised, and lending conditions tightened. House price falls accelerated in H2 2008, due to the global financial meltdown. The biggest falls occurred in Northern Ireland where house prices fell by 39.2% (-41.9% in real terms). London house prices fell by 19.8% (-23.3% in real terms).

The housing market started to recover in 2013, with nationwide house prices rising by 45.1% (32% in real terms) from 2013 to 2021. London had one of the biggest price growths, up 46.9% (32.6% in real terms) over the past eight years.

The UK’s and particularly London’s house price rises have, over the past decade, been fuelled by four factors:

  • Strong immigration and population growth, especially in London.
  • Interest rates are at record lows, with a large expansion of the money supply through “quantitative easing”.
  • Strong growth of the City of London.
  • Construction activity remains weak (though this is less true of London).

However, the UK housing market started to cool last year, as increasing interest rates and stubbornly high inflation had adversely affected consumer’s purchasing power. Nationwide house prices were down by 2.3% (-6.4% in real terms) in 2023, after increasing by 4.8% in 2022 (but fell by 4.2% in real terms).

United Kingdom Average House Price graph

Huge price gap between London and the rest of the UK

The gap between London and the rest of the UK remains huge, as house prices in the capital city gradually return to pre-pandemic levels. In Q1 2024, the average London home is worth more than double the average home elsewhere in the UK – a huge gap but still a far lower difference as compared to record highs recorded seven years ago. The average difference in price is £277,295 (US$ 347,220) in Q1 2024.

The gap between London prices and the rest of the UK peaked in Q1 2017, when home prices in the capital were 154% higher than the rest of the country, with an average price difference of £290,140 (US$363,305).

Despite the generally falling gap since Q2 2017, the average house price in London remains about 72% higher than at its peak in 2007. All other regions, except Northern Ireland, have higher property values in Q1 2024 than their 2007 peak prices:

  • Outer Metropolitan London is 60.3% up from the 2007 peak.
  • Outer South East is 52.5% up on 2007.
  • East Anglia is up by 46.2%.
  • East Midlands is up by 46.2%.
  • South West is up by 45.4%.
  • West Midlands is up by 43%.
  • Wales is up by 31.8%.
  • North West is up by 31.7%.
  • Yorkshire and Humberside is up by 28.5%.
  • North is up by 17.8%.
  • Scotland is up by 17.5%.

Northern Ireland had the weakest performance, with prices still more than 20% lower than at the 2007 peak.

United Kingdom Cost of London Home Compared to Rest of UK graph

Demand continues to fall

During 2023, the total number of residential property transactions in the UK fell by 19% to 1,019,220 as compared to a year earlier, following a 14.8% decline in 2022, according to HM Revenue & Customs.

Over the same period:

  • In England, residential property transactions dropped 19.8% y-o-y to 857,780, after declining by 15.4% in the prior year.
  • In Scotland, transactions were down by 11.1% to 93,080 in 2023, following an 8.3% fall in 2022.
  • In Wales, transactions plunged by 20.1% to 44,760 units, following an annual fall of 12.8% in the prior year.
  • In Northern Ireland, transactions were down by 17.3% y-o-y to 23,600 units, after dropping by 16.5% decline in 2022.

Demand remains weak this year. In Q1 2024, residential property transactions in the UK fell further by 7.8% y-o-y to 227,040 units, based on HM Revenue & Customs figures. Quarter-on-quarter, transactions were down by 13.8% during the latest quarter.

United Kingdom Residential Property Transactions graph

Residential construction activity falling again, and chronic housing shortage persists

UK’s residential construction activity is slowing again, amidst the increase in materials costs and high interest rates.

During 2023, dwelling starts fell by 15.6% to 148,930 units as compared to a year earlier, following a slight decline of 0.9% in 2022 and a growth of 36.9% in 2021, according to the Ministry of Housing, Communities and Local Government. Over the same period:

  • Private enterprise starts dropped 18.9% y-o-y to 115,740 units, after increasing slightly by 0.9% in 2022.
  • Housing association starts were down by 6.2% y-o-y to 30,170 units, following an annual fall of 5.3% in the prior year.
  • Local authority starts plummeted by 38.8% to 3,020 units, in contrast to a huge increase of 91.1% in 2022.

Likewise, dwelling completions fell by 11.1% to 158,190 units in 2023 from a year earlier, following increases of 1.7% in 2022 and 19.3% in 2021.

  • Private enterprise completions dropped sharply by 17.1% y-o-y to 119,890 units in 2023, after increasing slightly by 1.7% in the prior year.
  • Housing association completions rose by 13% y-o-y to 35,950 units, following a slight growth of 1.9% in 2022.
  • Local authority completions surged by 45.7% to 2,360 units, after rising slightly by 1.9% in 2022.

United Kingdom Dwelling Construction in England graph

With weak construction activity, chronic housing shortage persists. Accordingly, the completion level remains far below the government’s target of 300,000 new homes every year. Moreover, the UK’s per capita housebuilding rate remains low by international standards and failed to respond sufficiently to rising house prices during the boom, due to planning constraints.

For instance, in 2019, there were about 178,800 home completions in the UK. However at least 250,000 new homes must be built annually to match population growth, to replace the aging housing stock and the accumulated backlog, says the Town and Country Planning Association (TCPA).

Homebuilding in the UK stagnated at an average of 186,000 new units annually between 1991 and 2003, and from 2004 onwards barely exceeded 200,000 annually (222,940 in 2007).

“Every government arrives in office pledging to boost the number of new homes being built but the facts speak for themselves: in the 30 years from 1958 to 1988 around 7.5 million homes were built in England. In the subsequent three decades the number more than halved to around 3.1 million,” said Larry Elliot of The Guardian. “The supply of homes is affected by tough green belt regulations, local planning rules, and by the lack of a land value tax to deter hoarding.”

According to Rightmove, the chronic housing shortage in the UK is the primary driver of record house price rises in recent years.

Raising housing supply and other reforms

The Covid-19 pandemic brought about some immediate changes to the country’s planning policy, including enabling pubs to offer hot food takeaway services and changes related to permitted development rights (PDRs). But even before the pandemic, a reform of the planning system was already the subject of consultation to speed the system up and expand the housing supply. A housing white paper published in August 2020, including a concurrent consultation, details the government’s plans for upcoming changes to the planning system, including automatic approval for designated areas, priority for high-quality developments, replacing Section 106 by infrastructure levy, and discounts for developers building affordable homes.

“The whole thing is beginning to crumble and the time has come to do what too many have for too long lacked the courage to do – tear it down and start again,” said Prime Minister Boris Johnson. “That is what this paper proposes. Radical reform, unlike anything we have seen since the Second World War.”

“Not more fiddling around the edges, not simply painting over the damp patches, but leveling the foundations and building, from the ground up, a whole new planning system for England,” PM Johnson added.

The government published its response on local housing needs in December 2020, alongside a written ministerial statement. In February 2021, the Levelling Up white paper was released outlining various proposals related to planning. Then in March 2021, the consultation outcome on revised PDRs, housing delivery, and public infrastructure was published. In a statement to the House of Commons in February 2022, the Secretary of State for Levelling Up Michael Gove outlined its planning and regeneration measures.

In January 2024, the Department for Levelling Up, Housing, and Communities (DLUHC) launched another consultation on reforms to social housing allocations in the country.

Then in March 2024, the government unveiled a Levelling Up budget worth £400 million spread among 20 towns across England, Scotland, Wales, and Northern Ireland. Each of the said towns will receive up to £20 million (US$25.1 million) of funding and support over 10 years to invest in communities and regeneration.

Before the proposed reform to the planning system, the government had already undertaken several measures in the past to address supply shortages. By end-2020, £7.1 billion (US$8.9 billion) was allocated over 4 years to a National Home Building Fund to build more affordable, and sustainable homes across England. In addition, the Tenant Fees Act 2019 has banned letting agents’ fees to tenants.

In 2014 a Starter Homes policy was announced to address the affordable housing crisis. The Starter Homes policy is aimed at households with combined incomes below £80,000 (US$100,323), or £90,000 (US$112,863) in London. Starter homes must cost a minimum of 20% less than the market value, and the maximum price after the discount will be £450,000 (US$564,315) in London and £250,000 (US$313,509) elsewhere. Buyers of starter homes will need a mortgage. If the property is resold within 15 years, some or all of the discount must be repaid.

However, a review conducted by the National Audit Office in November 2019 showed that building had not yet commenced, despite £173 million being spent to buy land for affordable properties, partly because enabling legislation was never passed. As such, the policy was formally scrapped in 2020 and was replaced by a new scheme aimed to deliver only 6,600 homes – and only about 36% of these homes will meet the current definition of affordable housing, according to Homes England. This left about 85,000 young people waiting in vain for an affordable home to live.

United Kingdom Value of Residential Construction graph

Interest rates remain high

In March 2024, the Bank of England (BoE) kept its key rate unchanged at 5.25%, following fourteen consecutive rate hikes since December 2021, to rein in inflationary pressures. It remains the highest level in more than 16 years. As a result, inflation is gradually easing in recent months. In March 2024, inflation in the UK slowed to 3.2% - the lowest level recorded since September 2021.

“The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 20 March 2024, the MPC voted by a majority of 8–1 to maintain Bank Rate at 5.25%,” said the central bank.

“Headline CPI inflation has continued to fall back relatively sharply in part owing to base effects and external effects from energy and goods prices. The restrictive stance of monetary policy is weighing on activity in the real economy, is leading to a looser labor market, and is bearing down on inflationary pressures. Nonetheless, key indicators of inflation persistence remain elevated,” the central bank added.

As expected, mortgage rates remain high. In March 2024, the average interest rates for mortgages with 75% loan-to-value (LTV) were:

  • 2-year fixed-rate mortgages (FRMs): 4.97%, up from 4.74% a year earlier and 2.14% two years ago
  • 3-year FRMs: 4.53%, up from 4.26% in March 2023 and 2.11% in March 2022
  • 5-year FRMs: 7.92%, up from 7.16% a year earlier and 3.99% two years ago
  • 10-year FRMs: 4.78%, up from 4.33% a year earlier and 2.5% in March 2022
  • Standard variable rate mortgages: 5.94%, up from 4.93% a year ago and from 2.86% two years prior

United Kingdom Interest and Mortgage Rates graph

The mortgage market continues to decline

The UK’s mortgage market is declining again, as buyers and investors struggle due to high borrowing costs and an ailing economy. During 2023, the total number of approvals for lending secured on dwellings plunged 29.4% to 1,023,485 compared to a year earlier, after falling by 7.3% in 2022.

In 2023:

  • House purchase loan approvals plummeted by 23.2% to 577,267 from the same period last year, following a drop of 19.8% in 2022, according to the Bank of England.
  • Remortgage approvals fell sharply by 33.8% y-o-y to 355,763 during 2023, in stark contrast to a y-o-y growth of 16.9% in 2022.
  • Other secured lending approvals plunged by 43.7% y-o-y to 90,455, worse than the prior year’s modest contraction of 3.8%.

The value of gross mortgage advances stood at £54 billion (US$67.7 billion) in Q4 2023, down by 13.4% as compared to the previous quarter and by a huge 33.8% from a year ago.

As such, the total value of outstanding residential mortgage loans fell by 1.1% to £1.66 trillion (US$2.08 trillion) in Q4 2023 from a year earlier, according to the Bank of England. On a quarterly basis, it was down slightly by 0.1%.

However, there are signs of some improvements in the residential mortgage market in the first quarter of 2024.

The top five lenders accounted for more than 64% of outstanding mortgage loans (Lloyds Banking Group, 19%; Nationwide BS, 12.5%; NatWest Group, 11.5%; Santander UK, 11.3%; and Barclays, 9.9%), according to UK Finance.

United Kingdom Approvals for Lending Secured on Dwellings graph

Arrears and repossessions increasing

Amidst the financial strain on borrowers caused by high borrowing costs and a struggling economy, arrears and repossessions are now noticeably increasing.

During 2023, there were 340,110 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, up by 13.3% from a year earlier, in contrast to an 8% fall in 2022, based on figures from UK Finance. Likewise, buy-to-let mortgage arrears surged by 76.1% y-o-y to 41,090 in 2023.

“The number of mortgage holders in arrears, whilst still low, is continuing to rise as the cost of living and high-interest rates take their toll on households,” said Eric Leenders, Managing Director of Personal Finance, UK Finance.

During 2023:

  • Arrears of 2.5% to 5% of balance: homeowner mortgages in arrears rose by 26.4% y-o-y to 128,660 and buy-to-let mortgage arrears soared 126.3% to 21,200
  • Arrears of 5% to 7.5% of balance: homeowner mortgage arrears increased 17.1% to 59,920 while buy-to-let mortgage arrears surged 84.8% to 8,170
  • Arrears of 7.5% to 10% of balance: homeowner mortgage arrears rose by 8.8% to 34,440 and buy-to-let mortgage arrears were up 51.2% to 3,690
  • Arrears over 10% of balance: homeowner mortgage arrears increased slightly by 1.2% to 117,090 while buy-to-let mortgage arrears rose by 13.1% to 8,030

United Kingdom Mortgage in Arrears graph

In 2023, homeowner mortgage possessions rose by 7.3% to 2,660, following a whopping 101.6% increase in 2022, as the voluntary possessions moratorium in response to the Omicron variant, ended on January 4, 2022. Likewise, buy-to-let mortgage possessions were up by 26.2% to 1,830 in 2023, after rising by 39.4% in 2022.

United Kingdom Mortgage Possessions graph

Help-to-Buy scheme’s new version introduced

Recently, the government announced a new version of the Help-to-Buy scheme with tighter lending criteria. The Help-to-Buy scheme helps first-time homebuyers to purchase or self-build a new house or apartment. Unlike the old scheme, the new version is now restricted to first-time buyers, which means that a buyer cannot have owned a home in the UK or abroad before. Moreover, the new scheme includes regional property price caps to ensure that it helps those people who need it most. The cap is 1.5 times the average first-time buyer price in the area.

Property price cap per region under the new scheme:

  • In London, the maximum property price that qualifies for a loan is £600,000 (US$ 749,853)
  • In Yorkshire, the price limit is £228,100 (US$ 285,069)
  • In the North-East, the price limit is £186,100 (US$ 232,579)
  • In the North-West, the cap is £224,400 (US$ 280,445)
  • In East Midlands, the price limit is £261,900 (US$ 327,311)
  • In West Midlands, the price limit is £255,600 (US$ 319,437)
  • In the South-West, the price limit is £349,000 (US$ 436,164)
  • In the South-East, the price limit is £437,600 (US$ 546,893)

The loan is interest-free for the first five years. In the sixth year, buyers will be charged an interest of 1.75%. The interest rate will then increase annually based on the consumer price index (CPI) plus 2%. The equity loan must be repaid when the mortgage is repaid, when the home is sold, or after 25 years.

Through the Help-to-Buy Equity Loan, the government loans homebuyers up to 20% (or 40% in London) of the full purchase price of a new-build property, provided that borrowers contribute 5% of the property price as a deposit, and secure a mortgage for the remaining 75% of a property. The homebuyer is not allowed to sub-let the property and it must also be his/her only property.

Since its inception in 2013 until the first half 2023, over 387,000 homes in England have been bought using it, based on government figures. Of which, South East accounted for the biggest share of 18.1% of the total loans approved, followed by East of England (13.2%), London (11.4%), North West (11.4%), South West (11.2%), East Midlands (10.8%), West Midlands (9.8%), Yorkshire and The Humber (8.4%), and North East (5.6%).

United Kingdom Number of Help to Buy Equity Loans graph

Rental yields are moderate to good

The average rental yields in the UK stood at around 5.6% to 8.9% in 2023, according to a Global Property Guide research conducted in September 2023.

By major cities:

  • In London, the gross rental yields for apartments ranged from 2.39% to 7.46%, with a city average of 5.75%.
  • In Manchester, apartments offer rental returns of 6.19% to 8.4%, with a city average of 7.42%.
  • In Liverpool, rental yields ranged from 6.19% to 12.26%, with a city average of 8.26%.
  • In Birmingham, rental yields ranged from 5.78% to 8.46%, with a city average of 7.14%.
  • In Edinburgh, gross rental yields ranged from 4.91% to 6.04%, with a city average of 5.6%.
  • In Glasgow, apartments offer rental yields ranging from 8.28% to 9.25%, with a city average of 8.89%.
  • In Bristol, rental yields ranged from 5.71% to 8.4%, with a city average of 7.07%.
  • In Leeds, rental yields ranged from 5.05% to 7.92%, with a city average of 6.92%.

The rental market remains tight; rents rising strongly

Rents continue to rise rapidly, mainly due to strong demand and a low supply of rental housing. Private rental prices paid by tenants in the UK rose by 6.2% in the twelve months to January 2024, up from increases of 4.4% in the previous year and 2.1% two years ago, according to the ONS. The past three months had been the highest annual growth recorded since the series began in January 2016.

Over the same period:

  • In England, rents of private houses increased 6.1%, up from growth of 4.3% a year earlier and 2% two years ago.
  • In Wales, private house rents were up strongly by an average of 7%, following increases of 3.9% in January 2023, 1.4%, and January 2022.
  • In Scotland, house rents rose by 6.8%, after increasing by 4.5% in the previous year and 2.6% two years ago.
  • In Northern Ireland, house rents rose by nearly 10%, following increases of 9.9% a year earlier and 6.3% two years ago.

United Kingdom Index of Private Housing Rental Prices graph

All nine regions saw a continued increase in private rental prices in the twelve months to January 2024. London registered the biggest increase of 6.9%, followed by West Midlands (6.2%), and South East (6%). Rents also rose by 5.8% in East Midlands, 5.7% in North West, 5.6% in both South West and Yorkshire and The Humber, 5.4% in East, and 4.7% in North East.

Yet these supply and demand pressures are not fully reflected in the Index of Private Housing Rental Prices (IPHRP), which accounts for price changes of all private rental properties rather than only newly advertised rental properties.

Tenant demand remains stable while supply is still restricted, according to the Royal Institution of Chartered Surveyors (RICS) Residential Market Survey in March 2024.

“Across the lettings market, the aggregate gauge of tenant demand remains modestly positive at a net balance of +19% (marginally up on a reading of +16% last month),” said RICS. “That said, the supply of rental properties becoming available remains restricted, as the landlord instructions indicator once again exhibits a weak net balance reading of -19%.”

Rents are projected to continue rising this year, amidst a limited supply of rental properties.

“There may be 30% more rental homes on the market than a year ago, yet the total stock of properties is still as much as 41% below the number available in 2019, and unlikely to return to that level in the foreseeable future,” said Hamptons International.

“As a result, rental growth is set to be stubbornly sticky, remaining above the rate of inflation for the rest of 2024.”

UK economy struggling, inflation continues to ease

In the fourth quarter of 2023, the UK economy contracted by 0.3% from the previous quarter, following a 0.1% decline in Q3 2023 – officially entering a technical recession, as record borrowing costs and weak external demand weighed on economic activity. On an annual basis, the economy shrunk by 0.2%, following minuscule y-o-y declines of 0.2% in Q3, another 0.2% in Q2, and 0.3% in Q1. 

For the whole year of 2023, the UK economy was estimated to have increased by a meager 0.1%, a sharp slowdown from growth of 4.3% in 2022, and 7.6% in 2021, according to the Office for National Statistics.

“GDP is estimated to have increased by an unrevised 0.1% in 2023, following growth of 4.3% in 2022. Excluding the year 2020, which was affected by the coronavirus (COVID-19) pandemic, this is the weakest annual change in real GDP since the financial crisis in 2009,” said the national statistics agency.

The National Institute of Economic and Social Research (NIESR) expects the UK economy to remain subdued this year, with a projected real GDP growth rate of 0.9%. The International Monetary Fund (IMF) is even more pessimistic, forecasting a growth of just 0.5%.

“UK GDP growth will likely remain sluggish into the medium term. We now think the United Kingdom was in recession in the second half of 2023 and that GDP grew by only 0.3 percent in 2023. We expect GDP to grow by 0.9 percent in 2024 and at a similar rate throughout the rest of the forecast,” said the NIESR.

Before the pandemic, the UK’s economic growth had been anemic, at best. From 2001 to 2019, the economy expanded by an annual average of just 1.7%. Then in 2020, the economy suffered a record contraction of 11% - its worst performance in recent history.

United Kingdom GDP Growth and Inflation graph

The UK’s GDP growth per capita figures are also unimpressive. GDP per capita has been growing by an annual average of just 0.3% from 2010 to 2020, and actually plunged by 9.7% in 2020, according to IMF. GDP per capita grew by 7.3% in 2021, as pandemic-related restrictions were loosened due to the low base effects in the prior year. However, GDP per head declined again by 0.7% last year.

“Real GDP per head is estimated to have fallen by 0.6% in Quarter 4 2023 and has not grown since Quarter 1 (Jan to Mar) 2022. Across 2023 as a whole, GDP per head is estimated to have fallen by 0.7%,” reported the ONS.

Inflation is now easing. In March 2024, nationwide inflation slowed to 3.2%, down from 3.4% in the previous month and 10.1% in the same period last year. In fact, it was the lowest level recorded since September 2021, mainly driven by a slowdown in food price increases.

Overall inflation averaged just 2% from 2011 to 2021, before surging to 9.1% in 2022 and staying elevated at 7.7% in 2023.

The labor market remains stable. The UK’s overall unemployment rate was 4.2% in the three months to February 2024, up from 3.9% a year earlier, according to the Office for National Statistics. The jobless rate had been averaging 7.6% in 2009-14 before falling to 4.4% in 2015-23.

The UK voted to leave the European Union (EU) in 2016 and officially left the trading bloc, its biggest trading partner, on January 31, 2020. However, both parties agreed to continue their trading arrangements until December 31, 2020, to allow enough time to agree to the terms of a new trade deal.

United Kingdom Unemployment Percentage graph

Sources:

United Kingdom - More data and information